A court in South Korea has issued an arrest warrant for Do Kwon, founder of Terra (LUNA) Bloomberg reports in a news release. The order most likely has to do with the violation of South Korean capital market rules.
Artificially inflated prices
The court in Seoul (capital of South Korea), wants Do Kwon and five others arrested. This order was described in a text message from the prosecutor’s office. Do Kwon in fact caused a violation of capital market rules that led to the collapse of the Terra system.
In a lawsuit, a law firm alleged that Terra violated the Exchange Act by “misleading small investors” and ultimately encouraged them “to buy Terra Tokens at artificially inflated prices.”
Do Kwon pulled 2.7 billion out of the system
In May of this year, the stablecoin Terra USD (UST) began deviating from the dollar when it was actually supposed to stay at $1. As a result, the system lost its balance, causing Terra’s token to lose more than 99% of its value.
Do Kwon was accused of stealing large amounts of money before the Terra system collapsed.
One member of the Terra community said Do Kwon withdrew $2.7 billion from this system. Do Kwon responded that he only received salary from Terraform Labs (the company behind Terra) for the past 2 years.
LUNC and LUNA 2 decline
The arrest warrant is making quite a stir in the market. A recovery plan had recently been made for the Terra system, which restored confidence in the project among some Lunatics (fans of LUNA). But despite this effort, this confidence now seems to be ebbing away.
LUNA Coins made a big surge last week, but fell sharply in value this morning. LUNA 2 took the biggest hit, dropping more than 40% in a 2-hour period. Luna Classic (LUNC) fell 25% in the same period.
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